Canadians have had their fill of debt. For the 10th straight year, Canadians have told a CIBC poll that getting out of debt is their top financial priority.
Numerous surveys and statistics over the past year have demonstrated how far into personal debt many Canadians have fallen. Now, those economic concerns are weighing on their minds as they enter a new decade.
“Whether it’s daily household items or unexpected events, expenses can fluctuate for reasons that are often outside of our control,” Jamie Golombek, Managing Director, CIBC Financial Planning and Advice, said in a statement. ” The best way to buffer against uncertainties is to have a financial plan.”
Golombek said a financial expert can help prioritize a person’s needs and prepare them for potential economic changes.
“Debt repayment doesn’t need to be worrisome; it needs to be managed,” he said “But, it shouldn’t come at the expense of savings. A strong financial plan incorporates debt management strategies, savings for financial goals, and a balanced portfolio with investments designed to make money in all market conditions.”
The poll found that 71 per cent of Canadians say they held back from borrowing more money in 2019 because of their debt situations. The same percentage were also concerned about the rising costs of household goods this year.
Other findings include:
- 55 per cent agree they are worried about a potential recession in 2020.
- 78 per cent feel it is better to pay down debt than build savings.
- 33 per cent worry they are forsaking building a nest egg by focusing too much on paying back money owed.
- 60 per cent agree they are likely better ways to manage their money to meet financial goals.
- Paying down debt (21 per cent) is Canadians’ top financial priority in 2020, followed by keeping up with bills and getting by (18 per cent), growing investments or wealth (13 per cent), saving for a vacation (8 per cent), and saving for retirement (8 per cent).
- Top financial concerns for Canadians in 2020 are: the rising cost of goods/inflation (at 71 per cent, a 7 per cent increase from last year), the low Canadian dollar (30 per cent), low wages/lack of growth (29 per cent) and household debt (26 per cent).
- Compared to last year, fewer respondents are feeling optimistic about their financial situation in 2020 (32 per cent in 2019 versus 41 per cent in 2018).
- Of the 28 per cent of Canadians who say they did borrow more in the past 12 months, top reasons were: to cover day-to-day items (36 per cent), purchase a new vehicle (22 per cent), and for an unexpected financial emergency (15 per cent).